Mobile Communications Growth Projected to Power on in Sub-Saharan Africa

Unique mobile subscriber numbers are poised to hit 525 million mark in the year 2020 in Sub-Saharan Africa (SSA) according to a recent report from GSM Alliance. It is projected that actual connections will be 975 million. It is projected that mobile penetration rate will hit 49% across the region by the year 2020.

This represents an annual compound growth rate of 7% per year and makes SSA the fastest growing region with respect to mobile communications.

The mobile communications sector is a major contributor to the economy employing more than 2.4 million people directly and indirectly creating more than 3.7 million jobs. It is also a major source of tax revenue (approximately U$13 billion annually) for governments. It further generates license and spectrum auction fees for the regulatory agencies across Africa.

Between 2014 and 2014 the sector is expected to contribute up to 6.2% (or U$104 billion) up from 5.2% (or U$75 billion) of the region’s GDP in 2013.

On other hand, operators are expected to inject a total of U$97 billion in capital spending between 2014 and 2020 as they modernize their infrastructure and increase coverage. Infrastructure modernization would be extended rollout of 4G networks, which in turn is expected to see adoption of advanced devices to take advantage of 4G capabilities. It is projected that 40% of all mobile devices will be smartphones. The equivalent figure today is 5.1%.

The sector continues to witness innovation. There is expected to be increased activity in the licensing of Mobile Virtual Network Operators (MVNOs). The coming of thin SIM technology would also deliver substantial value added services to the sector.

The report also suggests that policy changes and tax regime adjustments can spur further growth.

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